September 2024 Almond Market Report

September’s Position Report shows that California almond growers have already harvested over 1 billion pounds of almonds, putting the industry +65.5% ahead of harvested volume a year ago.

Shipments in September were, on net, -1.9% below a year ago, with export shipments seeing growth of +1.8% while domestic shipments slipped -11%. Through two months, the industry has shipped -11.13% less than this time last year.

The industry added 273 million pounds of new commitments in September. This is on par with the pace of 269 million pounds contracted in September a year ago. The industry now has over 667 million pounds on the books for future shipment, just -1.0% behind commitment levels from a year ago.

Harvest Continues

Harvest conditions have been near ideal. September brought generally dry and often unseasonably warm weather - perfect weather for harvesting and conditioning almonds. With an early start to the season and no weather issues to speak of, growers have been hard at work and brought in nearly 745 million pounds in September. While an impressive volume, and certainly larger than last year, such volume is consistent with the conditions that we saw.

October usually ushers in a change in weather with cooler temperatures more prevalent. Early season precipitation is not unheard of, but the rainy seasons is still a ways off. An average October should see harvest continue at its breakneck pace with expectations of large volumes coming to handlers in October. This has hullers anticipating an earlier end to harvest season than we saw last year.

While the eventual crop size could have significant impacts on markets, eventual inventory is still very much a guessing game. With sufficient inventories now making their way to handlers, pressures on the supply side for prompt shipments have largely subsided, however some handlers may still find inventories of particular sizes and/or specs in short supply depending on their cleaning and sizing operations and prior inventories levels.

World Markets

Through two months, India is effectively even, importing about -1 million pounds less than a year ago (-1%). Compared to last September, shipments may appear to be dropping, with shipment figures this September down -12.6% YoY; however, the late start to harvest a year ago suppressed shipments in August 2023 which put added pressure on September to recover from the backlog. On the whole, demand from the subcontinent remains strong. With Diwali less than a month away, buying has shifted to post-festival needs.

As a region, Western Europe is off -35% and all major markets are off double digits through the first two months of the crop year. This represents a decline of -35 million pounds YoY. Germany is off -55% and has seen the largest drop in volume having imported -12 million pounds less through two months than a year ago. Spain has also seen major declines, importing -10 million pounds less YoY. The US did experience a brief worker strike at East Coast ports, which would service European destinations, but the strike was short lived and wasn’t seen to have had any major or sustained impacts on freight logistics.

China is off -28% on the crop year; however, shipments in September kept pace with import levels from a year ago. Both kernel and inshell shipment figures were effectively on par with those from a year ago. We believed that low inventory levels through the transition of China’s preferred specifications significantly impacted August’s shipment levels, and it’s a welcome sign to see shipments rebound now that harvest has provided adequate inventories.

Vietnam has been a bright spot and has seen growth through the first two months of the crop year. Shipments are up +60%. This continues its trend of steady shipment growth that was observed last year and signals resiliency in its ability to act as a value-added market.

The Middle East more than doubled its shipments in September over a year ago and imported over 38 million pounds. Through two months, the region is up +36%. Its largest market, the UAE, is up +11% on the year, while Turkey is up +88%. Turkey has long lagged behind the UAE in total volume, but was nearly on par with the UAE in September and trails the UAE on the year by just 2 million pounds. Elsewhere in the region, Saudi Arabia boasts +400% growth from a year ago; but, this figure is misleading, as shipments from a year ago were especially light. Compared to figures from 2022, Saudi Arabia is up a more modest +18%. On the whole, the region continues to show strong and growing demand for California almonds. It could again be a driving force in shipment growth in the year ahead.

North Africa will be a region to keep an eye on in the coming months. Growth the region enjoyed over the past crop year may be eroding. Morocco for instance is off -66%, representing a reduction of 5.5 million pounds. As a region, North Africa has imported -10 million pounds less this year than a year ago.

Market Pressures

Prices generally continued to firm as handlers worked through the transition and balanced incoming inventories with customer demands. August shipments were seen as being suppressed by dwindling supplies through the transition, but as inventories recovered with harvest, prices have remained firm. Export markets grew +1.8% YoY in September in face of a large scale dock worker strike in East Coast ports. While it was brief and should not have lasting impacts, it may have suppressed some export shipments, particularly those to Europe. Collectively this builds confidence in persistent broad demand across export markets.

Harvest continues full tilt. While early field reports were of a 'normal' harvest, several large hullers in the south have reported that later varieties have been coming in lighter than expected in a few keys areas. This, alongside a early and uninterrupted harvest have many hullers expecting to end their operations earlier. We expect another large increase in receipts in October, but a quicker drop off in subsequent months is sure to follow.

A month from now we may have a better picture of eventual yields. Markets seem to be continuing to factor in a 2.8 billion pound harvest consistent with the Objective Forecast, but this level leaves little room for shipment growth. Handlers have been reluctant to put orders on the books beyond the end of the year, suggesting that handlers continue to see upside to the market and may be skeptical that the industry will harvest a full 2.8 billion pounds. Of course there is still plenty of room for speculative thinking regarding the eventual crop size, and we'll continue to monitor.

For now, there shouldn't be any rapid knee-jerk price swings; however, demand returning from EU markets is inevitable, India continues to expand consumption, and developing markets like the Middle East and Vietnam could also fuel growth. There is little need for handlers to overextend themselves with broad demand signals showing strength, so we expect upward pressure on prices to persist in the near-term. Should yields fall below 2.8 billion pounds and demand pressures persist, a longer term, and perhaps more rapid, trend would be expected.